£9bn of Tax to be ‘Overpaid’ by Britons This Year

A “colossal” £9bn of tax will be overpaid by Britons this year as people fail to take steps to the amount they pay, according to new research.

A study by a leading website found that people will waste:

£3.94bn in unclaimed tax credits;

£1.97bn through avoidable inheritance tax;

£742m lost through not saving money into a pension;

£516m in avoidable capital gains tax;

£442m from late or incorrectly submitted self-assessment tax returns;

£328m from failing to make use of personal allowances;

£36m in avoidable tax on savings interest.

On average every tax payer in the UK will pay £186 more than they need to, with 86% of people doing nothing to reduce their tax burden. Despite this, it is estimated that wastage has dropped 9% from the previous year.

“Whilst it is encouraging to see our annual tax wastage is set to go down by 9% this year, £9 billion is still a colossal amount to be lost through error and avoidable circumstances,” said Karen Barrett, chief executive.

R&D Tax Credit to Survive Tory Election Win

The Tories have ditched plans to scrap tax incentives for research and development if they win the general election expected on 6 May.

Party leader David Cameron welcomed a report proposing the u-turn from opposition industry ‘Czar’ Sir James Dyson on how to rebalance the UK economy away from over-dependence on the City.

Cameron said the Dyson Report “represents an exciting and ambitious step forward in our desire to make Britain Europe’s leading generator of new technology”. 

Shadow chancellor George Osborne has previously proposed scrapping most of the corporation tax breaks in order to fund a reduction in the headline rate of tax on business.

But a Conservative spokesman said a Tory government “will keep R & D tax credits” refocused along lines proposed by Dyson, who urged that when public finances allow the rate of the relief should be increased to 200%.

The beneficiaries would be “high tech companies, small businesses and new start-ups “in order to stimulate a new wave of technology”.

Dyson also proposed increasing the generosity of the Enterprise Investment Scheme providing relief for “angel” investors.

Accountancy Age

2010 Budget Accounced

Gordon Brown has announced the Budget will be on Wednesday 24 March in 2 weeks

HMRC Sponsors New TV Series

A new TV series – “The Business Inspector” - has been sponsored by HM Revenue & Customs (HMRC). The programme will raise awareness among small businesses that they need to keep good records.
The Business Inspector is a four-part series that will be broadcast weekly on Five at 8pm from 10 March 2010.

Stephen Banyard, Business Customer Unit Director at HMRC said:

“We know that most small businesses want to get their tax right. But we also know too that failure to take reasonable care costs the Exchequer over £6bn a year, with a major cause being poor record keeping. We hope this series will raise awareness of the need for good record keeping.

“We also want small businesses to realise the benefits to them – such as improved cash flow – of taking better care of their records and paperwork.”

Presenter Hilary Devey said:

“Britain’s brimming with creativity but a terrifying number of businesses go bust each year and this shouldn’t be happening. I am going to teach businesses how to improve their all round business knowledge and direction, cash flow, marketing strategy and in some cases even their enthusiasm. Invaluable lessons they will never forget.”

Government Delays Crackdown on Tax in Construction

Plans for a clampdown on tax in the construction industry have been postponed until the New Year.

According to the industry magazine Construction News the focus on what the taxman regards as “false self-employment” will continue after the holidays when responses to current consultation are also expected to be published.

HMRC believes many people working in construction are in effect “employees” but adopt self employed status to avoid tax and national insurance contributions.

Accountancy Age

Pre-Budget Report 2009

Alistair Darling will make his Pre-Budget statement to the House of Commons on Wednesday 9 December 2009 at 12:30.

PBR Could See NI Hike for Rich

The pre-Budget report could see higher earners face a hike in their national insurance contributions on top of a rise in income tax, according to BDO.

Those paying income tax at 40% already face the prospect of a higher 50% band being introduced in April next year, but they may also be hit with a higher NI rate as the government tries to boost tax take.

Stephen Herring, senior tax partner at BDO said that chancellor Alistair Darling is unlikely to introduce a jump in the basic rate of income tax or another rise in the higher rate, but would be “less surprised if he were to introduce further increases in national insurance, where he could increase the upper earnings limit or contribution rates”, reported Citywire.

Herring also predicted more restrictions on personal tax reliefs, anti-forestalling measures to stop companies bringing forward dividend and bonus payments before the 50% rate is introduced, and yet more anti-avoidance legislation on bonus structures.

Paul Grant - Accountancy Age 18-11-2009

Summertime Ends 2009

Summer time will end on Sunday 25 October at 2.00am GMT throughout European Union Member States. The Clocks go backwards an hour. This means that at 2.00am British Summer Time (BST) the UK will move to 1.00am Greenwich Mean Time (GMT).

The 9th EC Directive on summer time harmonised, for an indefinite period, the dates on which summer time begins and ends across member states as the last Sundays in March and October respectively. Under the Directive, summer time begins and ends at 1.00am GMT in each Member State. Amendments to the Summer Time Act to implement the Directive came into force on 11 March 2002.

Time zones are the responsibility of individual Member States and vary across the EU. The UK is not planning to move to Central European Time.

The Criminal Records Bureau Reduces Fees

The Criminal Records Bureau (CRB) has reduced the fee for Standard Disclosures.

Following a pricing review, the government agency has agreed to reduce the fee charged for a Standard Disclosure from £31 to £26. The change will come into effect from today.

For the third year running the CRB has refused to increase its fees. The planned fee reduction has been made possible due to an expected increase in the volume of disclosure applications being processed as the new Vetting and Barring Scheme comes into place from 12 October.

Checks for volunteers will continue to be free of charge which provided a saving to the voluntary sector of approximately £27 million in 2008/09.

Home Office Minister Lord Brett said:

“The CRB plays a vital role helping to protect the most vulnerable in our society by giving employers the extra tools they need to make informed recruitment decisions.

“The cost of a CRB check continues to represent good value for money given the protection and assurance that such checks provide.

“In 2008 a further 18,000 unsuitable people were prevented from gaining access to children and vulnerable adults as a direct result of a CRB check, bringing the total to around 98,000 in the past five years.”

Today’s fee decrease follows the publication of the CRB’s Annual Report and Accounts and Business Plan for 2009/10.

The business plan outlines the priorities for the year ahead and shows that during the past 12 months the CRB has:

• worked closely with the Home Office and Independent Safeguarding Authority to develop systems and processes ready for the Vetting & Barring Scheme (VBS);
• launched the first electronic application channel, e-Bulk, which allows its largest volume customers to submit multiple applications online, bringing many benefits to the CRB and its customers, including faster results and improved quality and accuracy; 
• extended the range of jobs, posts and positions that are entitled to a CRB check as part of safer recruitment practices;
• increased customer satisfaction rates to an all-time high and gained overwhelming support for CRB checks on anyone working with children and vulnerable adults; and
• prevented a further 18,000 unsuitable people from gaining access to children and vulnerable adults as a direct result of a CRB check,brining the total to around 98,000 in the past five years.

This level of investment will continue during the next 12 months as the CRB works towards implementation of the Vetting and Barring Scheme and continues to maintain and enhance its existing services and overall performance.

From today, the following fee levels will apply throughout the remainder of 2009/10:

- Standard CRB check £26 (reduced from £31)
- Enhanced CRB check £36
- POVAFirst check  £6

Broadband Tax ‘To Be Made Law’

Story by Jane Wakefield, Technology reporter, BBC News

A controversial broadband tax should be law before the next election, according to Minister for Digital Britain Stephen Timms.

The 50 pence a month tax applies to everyone with a fixed line telephone.

Speaking at a debate in London, Mr Timms said the tax will be presented to parliament as part of the Finance Bill.

But the Tory MP John Whittingdale said the tax, which could raise up to £175m a year to fund high speed networks, would be opposed by the Conservatives.

“I’m confident the Conservative party will oppose it. I object to it on the basis that it is another tax and is aimed at people who are using old technology,” said Mr Whittingdale, who is also chair of the DCMS (Department for Culture, Media and Sport) select committee.

Speaking at a debate organised by The BCS Chartered Institute for IT (formerly the British Computer Society), Mr Timms reiterated the government’s commitment to the levy and the other recommendations of Lord Carter’s Digital Britain report.

“We want to make high speed networks nationally available. The next-generation fund will help that and we will legislate for it this side of a general election,” he said.

No derailment

He told BBC News that the other recommendations of the Digital Britain report would “be built on” in the Digital Economy Bill, which will be presented to parliament in November.

There have been concerns in recent months that the Digital Britain report, which was unveiled in June, has been derailed.

Business Secretary, Lord Mandelson, has intervened to beef up the government policy on illegal file-sharing, which could include removing persistent offenders from the net.

Mr Timms denied the report had been sidelined.

“Nothing has been derailed. It is full steam ahead,” he told BBC News.

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